Investing in IPOs can be an exciting opportunity for investors to get in on the ground floor of a promising company. However, the process of Initial Public Offerings allotment can often be challenging, leaving many investors wondering why they are not able to secure an allotment despite applying for IPOs. In this blog, we will explore some of the common mistakes investors make when applying for IPOs and how they can increase their chances of getting an allotment.
Applying in the Right Category?
One common mistake that investors make is applying for IPOs in the wrong category. Let’s say you are applying for an IPO in the retail category, which has a price range of ₹90,000 to ₹2 lakhs. If you only submit one application from your home, your chances of getting an allotment may be lower compared to someone who has ₹50 lakhs and applies from all five accounts. This is because the number of applications submitted plays a role in the allotment process.
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Capital Size Matters?
Another factor that can affect Initial Public Offerings allotment is the size of your capital. Suppose you have a capital of ₹10 lakhs and you are applying for an IPO with just one account. In this case, your chances of getting an allotment may be lower compared to someone who has a larger capital and applies from multiple accounts. Having a bigger capital size gives investors an advantage in the IPO allotment process.
Exploring Small HNI Categories?
While it may be tempting to apply for IPOs in the big HNI (High Net Worth Individual) category, exploring opportunities in the small HNI category can increase your chances of getting an allotment. By applying from different accounts within the small HNI category, you can improve your chances of securing an allotment. This strategy allows you to diversify your applications and increases the probability of getting an IPO allotment.
Applying from Multiple Bank Accounts
Many investors wonder whether Initial Public Offerings allotments come through net banking or through UPI (Unified Payments Interface). The truth is that Initial Public Offerings allotments can come through both channels. If you have multiple demat accounts, it is recommended to apply from all of them. By doing so, you increase your chances of getting an allotment. The more demat accounts you have, the more applications you can submit, thus enhancing your chances of IPO allotment.
Conclusion IPO allotment
Securing an allotment in Initial Public Offerings can be a challenging task. However, by avoiding common mistakes and adopting effective strategies, investors can increase their chances of getting an IPO allotment. Applying in the right category, considering the size of their capital, exploring opportunities in small HNI categories, and submitting applications from multiple bank accounts are some of the strategies that can improve the chances of securing an allotment. Remember, IPO allotments are based on various factors, and a well-planned approach can significantly enhance your chances of success.